When Ancient Grudge is played with a damage bonus of 0 (Less than 4 cards in discard), it will deal no damage to anyone with a increased damage taken handicap card, such as Vulnerable or Squishy. Seems like a bug to me, since the card has an attack value, but it's simply not getting boosted vs opponent handicaps.
more of a math thing, you need to do base damage to get extra damage. Seems reasonable from a flavour point of view.